Oregon's farm income falls 41 percent

The bad news delivered this week by the U.S. Department of Agriculture came as no surprise to local farmers.

For Central Point dairyman David Wolff and hay grower Keith Corp of Ashland, news of Oregon's 41 percent decline in net farm income confirmed what they already knew — 2009 was a bad year.

"Most of my business is horse hay and horse people quit buying hay," said Corp. "I don't know if they were putting their horses out in grandma's pasture or what, but it was the first time in 15 years that I had hay left over. Mine wasn't down quite that bad, but it was down quite a lot."

Oregon's 2009 net farm income of $563 million — the lowest in seven years — trailed the 2008 figure of $861 million, which paled compared with the 2004 record of $1.3 billion.

"I'm the major supplier for Grange Co-op and they weren't buying from them either," Corp said. "There was a lot of onesies and twosies, but not a lot of buying. It was kind of a bum deal out here on the farm."

Washington farmers' net income fell 43 percent and Idaho decreased 49 percent from 2008, while California saw a substantially narrower drop of 11 percent.

The average decline nationally was 28 percent in 2009, after an increase in 2008.

"We saw a 35 to 40 percent reduction in the milk price," said Wolff, who has 48 milk cows.

"The only good thing was my costs for fertilizer and feed prices were down about 25 percent. Irrigation, insurance, property taxes and those kinds of things never go down, they always go up."

Brent Searle, an analyst with the Oregon Department of Agriculture, said expenses essentially played no role in the decline.

"Last year was the first time in many years that the value of production decreased, and it dropped way down in both crops and livestock," he said.

Oregon's net farm income bottomed out in 1983 at $283 million, then peaked in 1992 at $681 million and in 1997 at $672 million.

A down trend followed, with net income slumping to $407 million in 2000 and $433 million in 2001 before more than doubling in 2003, pushing past the $1 billion mark for the first time in 2004.

"What's going on right now is following past patterns," Searle said. "A downturn isn't anything new, but the magnitude of last year's net farm income drop is significant."

The USDA is forecasting a bounce-back year in 2010, but that is news to Corp.

"It's not bouncing back in my market," Corp said. "I've still got hay sitting there in the barn and I've sold just a minor amount of tonnage."

He attributed some of the decline to three of his four stable clients going out of business, including one who declared bankruptcy and another who "got tired of chasing down boarders."

Things are better this year, Wolff said. "We've had a slight rebound, but not like what we had in 2008."

Reach reporter Greg Stiles at 541-776-4463 or e-mail business@mailtribune.com.

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